Treasury Secretary Scott Bessent warns Governor Gavin Newsom that his threat to withhold $80 billion in federal taxes would constitute “criminal tax evasion,” as tensions escalate over transgender athletes in girls’ sports.
Key Takeaways
- California Governor Newsom threatened to withhold $80 billion in federal taxes after President Trump vowed to penalize the state for allowing biological males in girls’ sports.
- Treasury Secretary Bessent condemned Newsom’s threat as “criminal tax evasion” that could leave California residents liable for unpaid federal taxes.
- The Department of Justice has launched a federal probe into California for potential Title IX violations related to transgender athletes in girls’ sports.
- President Trump has pledged to impose “large scale fines” on California for allowing a biological male to compete and win in girls’ state finals.
- California officials argue the state pays significantly more in federal taxes than it receives in return, calling potential funding cuts “unconstitutional and vindictive.”
Newsom’s Tax Rebellion Sparks Federal Showdown
A major confrontation between California and the federal government has erupted after Governor Gavin Newsom threatened to withhold an estimated $80 billion in federal taxes. The extraordinary move came in direct response to President Trump’s announcement that his administration would impose significant financial penalties on California for allowing biological males to compete in girls’ sports competitions. The dispute highlights the growing tension between conservative federal policies protecting women’s sports and progressive state approaches to transgender inclusion.
Treasury Secretary Scott Bessent swiftly condemned Newsom’s threat, issuing a stern warning about the legal implications of such an action. “Gavin Newsom is threatening to commit criminal tax evasion. His plan: defraud the American taxpayer and leave California residents on the hook for unpaid federal taxes,” said Scott Bessent, Treasury Secretary.
Trump Administration Takes Strong Stand on Women’s Sports
President Trump has made protecting women’s sports a priority of his administration, vowing to take action against states that allow biological males to compete against female athletes. The controversy intensified after a biological male athlete won state titles in girls’ track events in California, prompting immediate response from the White House. Trump made his position clear in a recent statement targeting the California governor directly, highlighting the biological advantages male athletes possess when competing against females.
“A Biological Male competed in California Girls State Finals, WINNING BIG, despite the fact that they were warned by me not to do so. As Governor Gavin Newscum fully understands, large scale fines will be imposed!” said Donald Trump, President of the United States.
The Department of Justice has now launched a formal investigation into California for potential Title IX violations, examining whether the state’s policies violate federal laws designed to ensure gender equity in educational programs and activities. The California Interscholastic Federation (CIF) had previously amended its rules to accommodate transgender athletes, a move that has significantly impacted competition outcomes and sparked outrage among parents of female athletes.
California Claims Financial Injustice
In defending his provocative tax withholding suggestion, Newsom highlighted what he views as a longstanding financial imbalance, arguing that California contributes far more to federal coffers than it receives in return. “Californians pay the bills for the federal government. We pay over $80 BILLION more in taxes than we get back. Maybe it’s time to cut that off, Donald Trump,” said Gavin Newsom, Governor of California.
California State Assembly Speaker Robert Rivas joined the governor in opposing potential federal funding cuts, describing them as “unconstitutional and vindictive.” The threatened funding cuts could impact numerous programs in California, including grants for the state’s university systems. While a White House spokesperson confirmed that no final decisions on funding cuts had been made, the administration has been clear about its commitment to protecting women’s sports from what it views as unfair competition.
Treasury Secretary Issues Legal Warning
Secretary Bessent didn’t just condemn Newsom’s threat but went further to caution state officials about personal legal liability. “I am certain most California businesses know that failing to pay taxes owed to the Treasury constitutes tax evasion and have no intention of following the dangerous path Governor Newsom is threatening. I would warn state officials, including payroll managers, that federal law attaches personal liability to an attempt to evade or defeat tax,” said Scott Bessent, Treasury Secretary.
Instead of pursuing what he characterized as an illegal tax withholding scheme, Bessent suggested Newsom consider implementing a tax-cutting plan for California similar to Trump’s federal tax cuts. This approach would provide relief to California taxpayers without risking legal jeopardy. Newsom’s office has not responded to requests for comment on the Treasury Secretary’s suggestions or warnings about potential legal consequences.
Broader Political Implications
The conflict over transgender athletes and federal funding is unfolding against a backdrop of wider tensions between California and the Trump administration on multiple fronts, including immigration enforcement and National Guard deployment. The dispute has also energized California gubernatorial candidate Steve Hilton, who has pledged to overturn laws protecting transgender competitors in sports if elected, aligning himself with the president’s position on protecting women’s sports.
As the federal probe into Title IX violations proceeds, the standoff shows no signs of resolution. The clash represents more than just a disagreement over sports policy—it highlights fundamental differences between conservative and progressive approaches to gender identity issues and states’ rights versus federal authority. For California taxpayers caught in the middle, the dispute raises serious questions about potential financial and legal consequences if state and federal officials fail to find common ground.
